TI BiH: The proposed Law on Financing Political Organizations of RS undermines the institutional order and legalizes extortion and corruption.

Banja Luka, 20. May 2025: The Law on Financing Political Organizations, which the parliamentary majority in the Republic of Srpska has submitted for urgent procedure, will create a parallel system and open up significant space for corruption. This will allow public money to be siphoned into party coffers through privileged private companies, while on the other hand, it will severely impact all parties that do not have control over public resources.

This undermines the institutional order and creates legal uncertainty, as it introduces the jurisdiction of the Republican Election Commission, even though the control of financing is prescribed by the Election Law and the Law on Financing Political Parties of BiH and is under the jurisdiction of the Central Election Commission of BiH.

The proposed Law abolishes budget financing for all parties in response to the OHR’s decision to suspend budget payments to SNSD and United Srpska, as its adoption nullifies the Law on Financing Political Parties from the budgets of the Republic, city, and municipality. The effects of this will be felt most by parties not in power, which will lose the largest portion of their income in this way, and the primary intention is to enable ruling parties to compensate for these revenues through donations from privileged private companies.

This solution allows them to donate up to 100,000 KM to the party, which directly contradicts the state law regulating this area. Additionally, higher limits are set on donations from party members and individuals, which is in complete opposition to the state law.

Furthermore, unlike the current BiH Law, no bans are foreseen on party donations from companies doing business with the state, which practically means the legalization of corruption and a form of extortion.

How this looks in practice is well known to the public from the “corona contracts” affair, where one of the accused in this case admitted in court that he allegedly took 250,000 KM of public money obtained through a tender to United Srpska. TI BiH has repeatedly warned about such occurrences because the reported election campaign expenses are much lower than the actual ones, and just for the last elections the parties reported at least 2.6 million KM lower expenses than TI BiH’s estimate.

From all this, it is clear that the ultimate goal of this proposal is to enable additional sources of funding for parties that have already been abusing public funds, and whose budget financing has now been abolished. What remains unclear is how the proposed law would even be enforceable, given that all issues of revenue, expenses, reporting, oversight, and auditing of parties are already regulated at the BiH level. Therefore, TI BiH calls on deputies to reject this solution because, apart from undermining the institutional order, it also introduces complete chaos in the area of political party financing.

Press rls_20.05.2025.